Hyundai advises on ILA strike contingencies

Wednesday, January 23, 2013

The liner carrier Hyundai Merchant Marine on Wednesday advised customers that if longshoremen at U.S. East and Gulf coast ports strike when their contract expires Feb. 6, it will have contingency plans in place.
“Rest assured HMM and our vessel partners have contingency plans in place to recover from a strike as early as is feasible in order to deliver your cargo to its final destination with as little delay as possible,” the line said in a customer notice.
Members of the International Longshoremen’s Association and their employers, represented by the U.S. Maritime Alliance, are negotiating a new labor deal. The deadline for a contract has been delayed twice during contentious negotiations, originally from the end of the September, and then the end of December.
“It is not feasible to divert East Coast vessels to the U.S. West Coast, so this is not part of our contingency planning,” Hyundai said. “Depending on the scope of the strike, however, some vessel schedules could be modified to skip a normal port of call and vessel operations could shift to an alternate port.
“If an East Coast strike occurs, HMM will continue to receive local and inland-point-intermodal (IPI) cargo in unaffected terminals and/or intermodal rail facilities in our network,” the line added. “If the rail network becomes impaired or port operations cease in a location, we will notify customers of the need to cease operations in those locations and/or corridors.”
Hyundai said shippers should pay particular attention to shipments in the days directly ahead of the deadline.
“Import cargo arriving on East Coast vessels prior to Feb. 6 should be picked up and the empty units returned as soon as possible,” Hyundai said. “Export cargo en route to an East Coast port will likely idle on the terminal or destination rail facility until the labor disruption ends. Import and export operations for West Coast ports are expected to proceed normally unless the East Coast work action is protracted. However, it is unlikely a short strike on the East Coast would be felt on the West Coast.”
Like many lines, Hyundai filed for permission to assess a congestion surcharge in the event of a strike. The surcharge ranges from $800 to $1,000 per container, depending on whether it’s an import, export, and the specific trade on which it is moving.
“If necessary, HMM plans to invoke the congestion surcharge separately for East Coast and West Coast ports,” the line said. “If a strike occurs, the (surcharge) may not be invoked immediately, while HMM ascertains the impact of the strike based on its scope,” the line said. “If HMM must activate the (surcharge), we will give advanced notice of a minimum of one business day through a customer bulletin and our Website. This notice will give our customers the ability to make an educated decision whether or not they will tender cargo once the (surcharge) is in place.”
Hyundai said, according to its tariff rules, the congestion surcharge is applicable solely on the date cargo is tendered to the carrier, so the surcharge cannot be assessed against any import or export load tendered prior to the activation date of the surcharge. - Eric Johnson